Exhibit
10.6


 


LETTER
AMENDMENT NO. 2

TO

THIRD AMENDED AND RESTATED MASTER SHELF AGREEMENT


 


As of
June 29, 2004


 


The Prudential
Insurance Company of America (“PICA”)

Pruco Life Insurance Company (“Pruco”)

Prudential Investment Management, Inc. (“Prudential”)

ING Life Insurance & Annuity Company (“ING”)

Each Purchaser listed on the Purchaser Schedule attached hereto

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4200E

Dallas, Texas 75201


 


Ladies and
Gentlemen:


 


We refer to the Third Amended and Restated Master Shelf Agreement dated
as of December 19, 1991 (effective as of January 13, 2003) (as
amended by the Letter Amendment No. 1 to Third Amended and Restated Master
Shelf Agreement dated as of April 24, 2003, the “Agreement”), among PICA,
Pruco, Prudential, ING and Western Gas Resources, Inc., a Delaware corporation
(the “Company”).  Unless otherwise defined in this Letter
Amendment No. 2 to Third Amended and Restated Master Shelf Agreement (this “Amendment”),
the terms defined in the Agreement shall be used herein as therein defined.


 


The Company has requested and, subject to the terms and conditions
specified herein, the undersigned holders of the Notes are willing to make,
certain amendments to the Agreement, all as more particularly set forth herein.


 


1.                                      Amendments
to the Agreement.  Subject to the
accuracy of the representations and warranties set forth in paragraph 2 hereof
and satisfaction of the conditions set forth in paragraph 3(c) hereof, the
undersigned holders of the Notes hereby agree with the Company to amend,
effective as of the date first above written, the Agreement as follows:


 


(a)                                  Paragraph
1A.  Restatement and Amendment of
Existing Agreement. 
Paragraph 1A of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:


 


“1A.                       Restatement
and Amendment of Existing Agreement.  The Company and PICA
entered into a Master Shelf Agreement dated as of December 19, 1991 as
amended by Letter Amendment No. 1 dated October 22, 1992.  On July 22, 1993, the Company and PICA entered
into an Amended and Restated Master Shelf Agreement which Amended and Restated
such Master Shelf Agreement, as amended, in its entirety.  Such Amended and Restated Master Shelf
Agreement was further amended by the Second Amended and Restated Master Shelf
Agreement effective as of January 31, 1996.  Such Second Amended


 

















 


and Restated Master Shelf Agreement was amended by Letter Amendment No.
1 dated November 21, 1997, Letter Amendment No. 2 dated March 31,
1999, Limited Waiver, Consent, Release and Amendment No. 3 dated June 1,
1999, Limited Waiver, Consent, Release and Amendment No. 4 dated
August 25, 2000, Letter Amendment No. 5 dated March 30, 2001 and
Letter Amendment No. 6 dated March 1, 2002.  (The Second Amended and Restated Master Shelf Agreement, as
amended, is referred to herein as the “Original Agreement”.)  Effective as of January 13, 2003, the
Original Agreement was further amended by the Third Amended and Restated Master
Shelf Agreement.  Such Third Amended and
Restated Master Shelf Agreement has been amended by Letter Amendment No. 1 to
Third Amended and Restated Master Shelf Agreement dated April 24, 2003 (“Amendment
No. 1”).  (The Third Amended
and Restated Master Shelf Agreement, as amended by Amendment No. 1, is referred
to herein as the “Existing Agreement”).  The Company has issued to PICA or Prudential
Affiliates $225,000,000 aggregate principal amount of Senior Notes (the “Original Notes”) pursuant to the Existing
Agreement, thereby reducing the Available Facility Amount (as defined in the
Existing Agreement) to $40,000,000.  The
Company, PICA, Pruco, Prudential, ING and Prudential Affiliates  entered
into that certain Letter Amendment No. 2 to Third Amended and Restated Master
Shelf Agreement dated as of June 29, 2004 (“Amendment No. 2”) to, among
other things, amend certain provisions of the Existing Agreement including,
without limitation, to increase the size of the Facility from $40,000,000 to
$150,000,000 and extend the period during which Notes may be issued.  Accordingly, the Company, Prudential, PICA,
Pruco and each Purchaser agrees that the Original Agreement is amended and
restated in its entirety to read as provided in this Agreement, as modified by
Amendment No. 1 and Amendment No. 2.


 


(b)                                 Paragraph
1B.  Authorization of Issues of Notes.  Paragraph 1B of the Agreement is amended by
deleting the reference to “$265,000,000” in the first sentence thereof and
inserting a reference to “$375,000,000” in lieu thereof.


 


(c)                                  Paragraph
2A.  Facility.  Paragraph 2A of the Agreement is amended in
its entirety to read as follows:


 


“2A.                       Facility.


 


2A(1).               Facility.  Prudential
is willing to consider, in its sole discretion and within limits which may be
authorized for purchase by the Prudential Affiliates from time to time, the
purchase of Notes pursuant to this Agreement. 
The willingness of Prudential to consider such purchase of Notes is
herein called the “Facility”. 
At any time, the aggregate principal amount of Notes stated in paragraph
1(B), minus (i) the aggregate principal amount of Notes purchased and
sold pursuant to this Agreement prior to such time (including the Original
Notes) and (ii) the aggregate principal amount of Accepted Notes which have not
yet been purchased and sold hereunder prior to such time, is herein called the


 


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“Available
Facility Amount” at such time. 
NOTWITHSTANDING
THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF NOTES, THIS AGREEMENT IS
ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY
PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE
NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC
PURCHASES OF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A
COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.


 


2A(2).  Limitation
on Facility.  Notwithstanding
anything in paragraph 2A(1), the Company may not request the issuance of Notes,
and neither Prudential nor any other Prudential Financial Entity shall be
required to purchase Notes pursuant to the Facility if, after the issuance of
such Notes, the aggregate amount of Western Exposure would exceed
$175,000,000.”


 


(d)                                 Paragraph
2B.  Issuance Period.  Paragraph 2B of the Agreement is hereby
amended by deleting the date “January 13, 2005” in the last sentence
thereof and inserting the date “June 29, 2006” in lieu thereof.


 


(e)                                  Paragraph
2D.  Request for Purchase.  Paragraph 2D of the Agreement is
hereby amended to (A) delete the word “and” from the end of clause (vi), (B)
renumber the existing clause (vii) to become clause (viii), and (C) insert new
clause (vii) that reads as follows:


 


“(vii) specify the Designated Spread for such Notes,
and”


 


(f)                                    Paragraph
2H.  Closing.  Paragraph 2H is amended by (A) renumbering
the existing paragraphs 2H(2) and 2H(3) to become paragraphs 2H(3) and 2H(4),
respectively, and (B) inserting the new paragraph 2H(2) that reads as follows:


 


“2H(2).  Series I
Closing.  The Company hereby
agrees to sell to the Purchasers and, subject to the terms and conditions
herein set forth, each Purchaser agrees to purchase from the Company under the
Facility $100,000,000 of 5.92% Senior Notes, Series I, due 2011 (the “Series I
Notes”) in the aggregate principal amount set forth opposite its
name on the Purchaser Schedule attached to Amendment No. 2 at 100% of
such aggregate principal amount.  The
Series I Notes shall be substantially in the form of Exhibit A-3
attached hereto.  The Company will
deliver to Prudential, at the offices of Baker Botts L.L.P. at 2001 Ross
Avenue, Dallas, Texas 75201, one or more Notes registered in the name of the
Purchasers, evidencing the aggregate principal amount of Series I Notes to be
purchased by the Purchasers and in the denomination or denominations specified
in the Purchaser Schedule attached to Amendment No. 2 against payment of
the purchase price thereof by transfer of immediately available funds to the
credit of the Company’s account #0180352922 at Bank of America N.A., Dallas,
Texas (ABA No. 111-000-012) on the date of closing, which shall be
June 30, 2004, or


 


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any other date upon which the Company and Prudential may mutually agree
in writing (the “Series I Closing”).”


 


(g)                                 Paragraph
2I.  Fees.


 


(I)                                    Paragraph
2I(1) of the Agreement is amended by deleting the reference to “Series H
Closing” in such paragraph and inserting a reference to “Series I Closing” in
lieu thereof.


 


(II)                                Paragraph
2I(4) of the Agreement is amended in its entirety to read as follows:


 


                                                “2I(4).  Structuring Fee. 
The Company will pay to the Purchasers of the Series I Notes
in the amounts set forth in Schedule 1 attached to Amendment
No. 2 a structuring fee in the aggregate amount of $100,000 on the Series
I Closing.”


 


(h)                                 Paragraph
5.  Affirmative Covenants.


 


(I)                                    Paragraph 5A of the Agreement is hereby amended to
(A) insert the word “and” at the end of clause (vii), (B) delete clauses
(viii), (ix), and (x) thereof, and (C) renumber the existing clause (xi) to
become clause (viii).


 


(II)                                Paragraph
5A of the Agreement is further amended to delete the references to paragraphs
6A(1), 6A(3), 6A(5) and 6B in the penultimate paragraph thereof.


 


(III)                            Paragraph 5E of the
Agreement is amended to delete the last sentence thereof and insert the
following in lieu thereof:


 


“The Company shall notify Prudential immediately of
any announcement by Moody’s or S&P of any downward change in a Debt Rating
of which any officer has knowledge.”


 


(IV)                            Paragraph
5O of the Agreement is amended in its entirety to read as follows:


 


“5O.  Credit Fee.   The Company shall pay
the holder of each Note originally issued by the Company prior to
January 1, 2004 (each such Note and each Note delivered in substitution or
exchange for any such Note pursuant to any provision of this Agreement, a “Pre-2004
Note”) a credit fee equal to 0.50% per annum of the principal amount
of such Pre-2004 Note during the period beginning January 1, 1999 (with
such credit fee accruing as if it had been in effect, continuously, beginning
January 1, 1999), through the day on which the Company provides to such
holder satisfactory evidence that the Company has received the Minimum Rating
or achieved the Required Debt Ratio.  If
the Company is downgraded below the Minimum Rating after having received the
Minimum 


 


4

















 


Rating and at such time does not have the Required Debt Ratio, the
Company shall pay the holder of each Pre-2004 Note a credit fee equal to 0.50%
per annum of the outstanding principal amount of such Pre-2004 Note, in respect
to such principal amount, during the period beginning the day after the Company
loses the Minimum Rating and ending on the day the Company again provides
satisfactory evidence to the holder of such Pre-2004 Note that the Company has
received the Minimum Rating or has once again achieved the Required Debt Ratio
(the credit fees applicable pursuant to the preceding two sentences are
referred to herein as the “Credit Fee”).  The Credit Fee shall be payable quarterly in arrears on the last
day of March, June, September and December of each year  commencing
March 31, 1999.”


 


(V)                                Paragraph 5P of the Agreement is amended to delete each reference
therein to “or paragraph 5Q”.


 


(VI)                            Paragraph 5 of the Agreement is amended to delete paragraphs 5Q, 5R,
5S, 5T, 5U and 5V in their entirety.


 


(i)                                     Paragraph
6.  Negative Covenants.


 


(I)                                    Paragraph
6A(1) of the Agreement is deleted in its entirety and the following is inserted
in lieu thereof:


 


“6A(1). 
[Intentionally Deleted].”


 


(II)                                Paragraph
6A(3) of the Agreement is deleted in its entirety and the following is inserted
in lieu thereof:


 


                                                “6A(3).  [Intentionally Deleted.]”


 


(III)                            Paragraph 6A(4) of the
Agreement is amended in its entirety to read as follows:


 


“6A(4).  Total Fixed Charge Coverage Ratio.  For
each fiscal quarter of the Company, the ratio of (i) the sum of (a) the
Consolidated Net Earnings of the Company for the four immediately preceding
fiscal quarters of the Company plus (b) the Company’s consolidated
interest expense and provision for income taxes, depreciation and amortization
for the four immediately preceding fiscal quarters of the Company that were
taken into account in determining such Consolidated Net Earnings to (ii)
the Company’s consolidated accrued interest expense for the four immediately
preceding fiscal quarters to be less than 3.00 to 1.00.”


 


(IV)                            Paragraph
6A(5) of the Agreement is deleted in its entirety and the following is inserted
in lieu thereof:


 


“6A(5). 
[Intentionally Deleted].”


 


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(V)                                Paragraph
6B of the Agreement is deleted in its entirety and the following is inserted in
lieu thereof:


 


“6B. 
[Intentionally Deleted].”


 


(VI)                            Clause
(iv) of paragraph 6C(10) of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:


 


“(iv)  any
other contract that is a guaranty, an endorsement or another form of contingent
liability in respect of the obligations, stock or dividends of any Person or
that, in economic effect, is substantially equivalent to a guaranty (other than
(a) the guaranties permitted by clause (vi) of paragraph 6C(2) and (b) any
guaranty of the performance of a Subsidiary of the Company, provided
that such guaranty does not guarantee Debt);”


 


(VII)                        Paragraph 6F of the Agreement
is deleted in its entirety and the following is inserted in lieu thereof:


 


“6F.                          Most Favored Lender Status.  The Company will not, and will not permit
any Subsidiary to, enter into, assume or otherwise be bound or obligated under
the NCNB Agreement (including, without limitation, any and all renewals,
extensions, refinancings, refundings, amendments, restatements, supplements, or
modifications thereof) if such agreement contains one or more Additional
Covenants or Additional Defaults, unless prior written consent to such agreement
shall have been obtained pursuant to paragraph 11C; provided, however,
in the event the Company or any Subsidiary shall enter into, assume or
otherwise become bound by or obligated under such agreement without the prior
written consent of the Required Holder(s), the terms of this Agreement shall,
without any further action on the part of the Company or any of the holders of
the Notes, be deemed to be amended automatically to include each Additional
Covenant and each Additional Default contained in such agreement.  The Company further covenants to promptly
execute and deliver at its expense (including the fees and expenses of counsel
for the holders of the Notes) an amendment to this Agreement in form and substance
satisfactory to the Required Holder(s) evidencing the amendment of this
Agreement to include such Additional Covenants and Additional Defaults, provided
that the execution and delivery of such amendment shall not be a precondition
to the effectiveness of such amendment as provided for in this paragraph 6F,
but shall merely be for the convenience of the parties hereto.  Notwithstanding the foregoing provisions of
this paragraph 6F, this Agreement shall not be deemed to include
Section 7.05(g) of the NCNB Agreement  as in effect on June 29, 2004, unless
such Section 7.05(g) is thereafter amended and constitutes an Additional
Covenant.”


 


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(j)                                     Events of
Default.


 


(I)                                    Paragraph
7A of the Agreement is amended by deleting the existing clause (v) and inserting
the following in lieu thereof:


 


“(v)  the
Company fails to perform or observe any term, covenant or agreement contained
in (x) the final sentence of paragraph 5E, (y) paragraph 5M, 5N
or 5P, or (z) paragraph 6; or”


 


(II)                                      Paragraph
7A of the Agreement is further amended by deleting clause (a) from the language
beginning immediately after clause (xvii) thereof and inserting the following
in lieu thereof:


 


“(a) if such event is an Event of Default specified in
clause (viii), (ix) or (x) of this paragraph 7A, all of the Notes at the time
outstanding shall automatically become immediately due and payable at par
together with interest and Credit Fee accrued thereof, without presentment,
demand, protest or notice of any kind (including, without limitation, notice of
intent to accelerate and notice of acceleration of maturity), all of which are
hereby waived by the Company,”


 


(j)                                     Definitions.


 


(I)                                    Paragraph
10A of the Agreement is amended by deleting the existing definition of
“Reinvestment Yield” and inserting the following definition in lieu thereof:


 


“Reinvestment Yield” shall mean, with
respect to the Called Principal of any Note, the Designated Spread over the
yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York
City local time) on the Business Day next preceding the Settlement Date with
respect to such Called Principal for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date on the display designated as Screen PX1 on the
Bloomberg Financial Markets Services System (or, if the Bloomberg Financial
Markets Services System shall cease to report such yields or shall cease to be
Prudential Capital Group’s customary source of information for calculating
yield-maintenance amounts on privately placed notes, then such generally
recognized source as is then Prudential Capital Group’s customary source of
such information), or if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15(519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement
Date.  Such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for


 


7

















 


various maturities.  The
Reinvestment Yield shall be rounded to that number of decimal places as appears
in the coupon of the applicable Note.


 


(II)                                The
following definition is inserted in paragraph 10A in the appropriate
alphabetical position therein:


 


“Designated Spread” shall mean 0.75% in the
case of each Series I Note and 0% in the case of each Note of any other Series
unless the Confirmation of Acceptance with respect to the Notes of such Series
specifies a different Designated Spread in which case it shall mean, with
respect to each Note of such Series, the Designated Spread so specified.


 


(III)                            Paragraph 10B of the
Agreement is amended by deleting the definitions of “Consolidated Net Earnings
Available For Restricted Payments”, “Consolidated Senior Debt”, “Debt Rating
Downgrade”, “Indenture”, “Mortgage”, “Oil and Gas Collateral”, “Replacement
Ratings Agency”, “Restricted Payment”, “Restricted Subsidiary”, and
“Significant Subsidiary”.


 


(IV)                            Paragraph
10B of the Agreement is amended by deleting the existing definitions of
“Available Facility Amount”, “Collateral”, “Debt Rating”, “Facility”,
“Intercreditor Agreement”,  “NCNB Agreement”, “Security Documents”,
and “Subordinated Debt” and inserting the following definitions in lieu
thereof:


 


“Available Facility Amount” shall have the
meaning specified in paragraph 2A(1).


 


“Collateral” shall mean (i) all of the
“Collateral” as defined in each Pledge Agreement, and (ii) all of the other
real or personal property of the Company, MIGC or any other Person in which a
lien or security interest is granted pursuant to any Security Document.


 


“Debt Rating” shall mean, as of any date of
determination, the rating as determined by either S&P or Moody’s of the
Company’s Debt under the NCNB Agreement or any replacement credit facility
therefor.


 


“Facility” shall have the meaning specified
in paragraph 2A(1).


 


“Intercreditor Agreement” shall mean that
certain Amended and Restated Intercreditor Agreement dated as of June 29,
2004, among Prudential, the holders of the Notes, the banks party to the NCNB
Agreement, and Bank of America, N.A., as collateral agent, as the provisions
thereof may from time to time be amended or waived in compliance with the terms
hereof.


 


“NCNB Agreement” shall mean that certain
Amended and Restated Credit Agreement dated as of June 29, 2004, among the
Company, Bank of America, N.A., as Administrative Agent and L/C Issuer,
JPMorgan Chase Bank,


 


8

















 


BNP Paribas, The Royal Bank of Scotland plc, and Wachovia Bank,
National Association, as Co-Syndication Agents, Wells Fargo Bank, N.A., Union
Bank of California, N.A., and U.S. Bank National Association, as
Co-Documentation Agents, and the lenders party thereto, as the provisions
thereof may from time to time be amended or waived in compliance with paragraph
6E.


 


“Security Documents” shall mean all security
agreements, deeds of trust, mortgages, chattel mortgages, pledges, guaranties,
financing statements, continuation statements, extension agreements and other
agreements or instruments now, heretofore, or hereafter delivered by the
Company or any Subsidiary to Prudential, the holders of the Notes or the
Collateral Agent in connection with this Agreement or any transaction contemplated
hereby to secure or guarantee the payment of any part of the obligations
hereunder or under the Notes or the performance of the other duties and
obligations of the Company or any Subsidiary under this Agreement, including,
without limitation, the Pledge Agreements.


 


“Subordinated Debt” shall mean unsecured
Debt of the Company for borrowed money that is subordinated in right of payment
to the payment of the Notes in a manner satisfactory to the Required Holder(s).


 


(V)                                The
following definitions are inserted in paragraph 10B in the appropriate
alphabetical order:


 


“Additional Covenant” shall mean any
affirmative or negative covenant or similar restriction applicable to the
Company or any Subsidiary (regardless of whether such provision is labeled or
otherwise characterized as a covenant) the subject matter of which either (i)
is similar to that of any covenant in paragraph 5 or 6 of this Agreement, or
related definitions in paragraph 10 of this Agreement, but contains one or more
percentages, amounts or formulas that is more restrictive than those set forth
herein or more beneficial to the holder or holders of the Debt created or
evidenced by the document in which such covenant or similar restriction is
contained (and such covenant or similar restriction shall be deemed an
Additional Covenant only to the extent that it is more restrictive or more
beneficial) or (ii) is different from the subject matter of any covenant in
paragraph 5 or 6 of this Agreement, or related definitions in paragraph 10 of this
Agreement.


 


“Additional Default” shall mean any
provision contained in any document or instrument creating or evidencing Debt
of the Company or any Subsidiary which permits the holder or holders of Debt to
accelerate (with the passage of time or giving of notice or both) the maturity
thereof or otherwise requires the Company or any Subsidiary to purchase such
Debt prior to the stated maturity thereof and which either (i) is similar to
any Default or Event of Default contained in paragraph 7 of this Agreement, or
related definitions in paragraph 10 of this Agreement, but contains one or more
percentages, amounts or formulas that is more restrictive or has a shorter
grace period than those set forth herein or


 


9

















 


is more beneficial to the holders of such other Debt (and such
provision shall be deemed an Additional Default only to the extent that it is
more restrictive, has a shorter grace period or is more beneficial) or (ii) is
different from the subject matter of any Default or Event of Default contained
in paragraph 7 of this Agreement, or related definitions in paragraph 10 of
this Agreement.


 


“Amendment
No. 1” shall have the meaning specified in paragraph 1A.


 


“Amendment
No. 2” shall have the meaning specified in paragraph 1A.


 


“Pre-2004
Note” shall have the meaning specified in paragraph 5O.


 


“Prudential Financial Entity” shall mean (i)
PICA, Pruco, Pruco Life Insurance Company of New Jersey and any other
corporation or other entity controlling, controlled by, or under common control
with, PICA.  For purposes of this
definition, the terms “control”, “controlling” and “controlled” shall mean the
ownership, directly or through subsidiaries, of a majority of a corporation’s
or other entity’s voting stock or equivalent voting securities or interests.


 


“Series
I Notes” shall have the meaning specified in paragraph 2H(2).


 


“Series
I Closing” shall have the meaning specified in paragraph 2H(2).


 


“Western Exposure” means, at any time, the
aggregate principal amount of (i) Notes outstanding at such time held by
Prudential Financial Entities (other than Notes held for separate accounts) and
(ii) Accepted Notes which Prudential Financial Entities have agreed to purchase
but which have not been purchased at such time (other than Accepted Notes to be
purchased for separate accounts).


 


(k)                                  Paragraph
11.  Paragraph
11 of the Agreement is amended to delete paragraph 11R in its entirety.


 


(l)                                     Exhibit
A-3.  A
new Exhibit A-3 is added to the Agreement in the form attached as Exhibit
A-3 hereto.


 


(m)                               Exhibit
C.  Exhibit
C to the Agreement is deleted in its entirety and Exhibit C attached
hereto is inserted in lieu thereof.


 


(n)                                 Exhibit
E.  Exhibit
E to the Agreement is deleted in
its entirety and Exhibit E attached hereto is inserted in lieu thereof.


 


2.                                      Representations
and Warranties.  In order to induce
each of you to enter into this Amendment, the Company hereby represents and
warrants as follows:


 


(a)                                  Due
Authorization; Noncontravention.  The execution, delivery and performance by
the Company and each Guarantor of this Amendment, the Agreement as amended
hereby, the Notes, the Guaranties, the Intercreditor Agreement and the Security


 


10

















 


Documents have in each case been
duly authorized by all necessary corporate or limited liability company action,
as applicable, and do not and will not (i) contravene the terms of the
charter and by-laws or other organizational documents of the Company or any
Guarantor, (ii) conflict with or result in any breach or contravention of,
or the creation of any Lien (other than the Liens created by the Security
Documents) under, any document evidencing any contractual obligation to which
any such Person is a party or any order, injunction, writ or decree of any
governmental authority binding on any such Person or its property, or
(iii) violate any applicable law binding on or affecting any such Person.


 


(b)                                 Binding
Effect. 
This Amendment, the Agreement as amended hereby, the Notes, the
Guaranties, the Intercreditor Agreement and the Security Documents constitute
the legal, valid and binding obligations of the Company and the Guarantors,
enforceable against such Persons in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws affecting the enforcement of creditors’ rights generally or by
equitable principles of general applicability.


 


(c)                                  Representations
and Warranties.  The representations and warranties of the Company and the Guarantors
set forth in the Agreement, the Guaranties and the Security Documents are true
and correct on and as of the date hereof, both before and after giving effect
to the effectiveness of this Amendment (except to the extent such
representations and warranties expressly are limited to an earlier date, in
which such representations and warranties are true and correct on and as of
such earlier date).


 


(d)                                 No
Defaults. 
No Default or Event of Default exists under the Agreement, the Notes,
any Guaranty, any Security Document or any other agreement or instrument
executed in connection therewith and no default or event of default exists
under the NCNB Agreement, any agreement or instrument executed in connection
therewith or any other material contract or agreement to which the Company or
any of the Guarantors is a party, and, to the Company’s knowledge, no such
default or event of default is imminent.


 


3.                                      Miscellaneous.


 


(a)                                  Effect on Agreement.  On and after the effective date of this
Amendment, each reference in the Agreement to “this Agreement”, “hereunder”,
“hereof”, or words of like import referring to the Agreement and each reference
in the Notes and all other documents executed in connection with the Agreement
to “the Agreement”, “thereunder”, “thereof”, or words of like import referring
to the Agreement shall mean the Agreement as amended by this Amendment.  The Agreement, as amended by this Amendment,
is and shall continue to be in full force and effect and is hereby in all
respects ratified and confirmed.


 


(b)                                 Counterparts.  This Amendment may be executed in any number of counterparts
(including those transmitted by facsimile) and by any combination of the
parties hereto in separate counterparts, each of which counterparts shall be an
original and all of which taken together shall constitute one and the same
Amendment.  Delivery of this Amendment
may be made by facsimile transmission of a duly executed counterpart copy
hereof.


 


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(c)                                  Effectiveness.  This Amendment shall become effective as of the date first above
written when and if each of the conditions set forth in this subparagraph (c)
shall have been satisfied.


 


(I)                                    Amendment.  Counterparts of this Amendment shall have been executed by the Company,
each Guarantor and the Required Holder(s) and shall have been delivered to
Prudential.


 


(II)                                NCNB Loan Documents.  The Loan Documents (as defined in the NCNB
Agreement) shall have been executed by all parties thereto, a final copy and
execution pages thereof shall have been delivered to Prudential and all of such
Loan Documents shall be in form and substance satisfactory to Prudential and in
full force and effect.


 


(III)                            Intercreditor Agreement.  The Intercreditor Agreement shall have been
executed by all parties thereto, a counterpart thereof shall have been
delivered to Prudential and such Intercreditor Agreement shall be in form and
substance satisfactory to Prudential and in full force and effect.


 


(IV)                            Representations and Warranties.  Each of the representations and warranties
made in this Amendment shall be true and correct on and as of the date hereof
as if made on and as of such date, both before and after giving effect to this
Amendment.


 


(V)                                Amendment Fee.  The Company shall have paid by wire transfer of immediately
available funds to the holders of Pre-2004 Notes in the amounts set forth in Schedule 2
hereto an amendment fee in the aggregate amount of $45,000.00.


 


(VI)                            Fees and Expenses of Counsel.  The Company shall have paid the fees, costs
and out-of-pocket expenses incurred by external counsel to Prudential in
connection with the preparation, negotiation, execution and delivery of this
Amendment and all transaction contemplated hereby.


 


(d)                                 Expenses. 
The Company confirms its agreement, pursuant to paragraph 11B of the
Agreement, to pay promptly all expenses of the undersigned holders of Notes
related to the preparation, reproduction, execution and delivery of this
Amendment and all matters contemplated hereby, including without limitation all
fees and expenses of counsel to such parties.


 


(e)                                  Governing
Law.  THIS AMENDMENT SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE
GOVERNED BY, THE LAW OF THE STATE OF NEW YORK.


 


(f)                                    Affirmation of Obligations and Liens.  Notwithstanding that such consent is not
required thereunder, each of the Guarantors consents to the execution and
delivery of this Amendment by the parties hereto, including, without
limitation, the increase in the aggregate amount of Notes that may be issued
under the Agreement to $375,000,000. As a material inducement to the
undersigned to amend the Agreement, each of the Guarantors respectively


 


12

















 


(i) acknowledges
and confirms the continuing existence, validity and effectiveness of the
Guaranty and Pledge Agreement, if any, to which it is a party, and any Liens
granted thereunder, and (ii) agrees that the execution, delivery and
performance of this Amendment shall not in any way release, diminish, impair,
reduce or otherwise affect its obligations under any such Guaranty or Pledge
Agreement or any Liens granted thereunder except that, upon the effectiveness
of, and on and after the date of this Amendment, each reference in such
Guaranty or Pledge Agreement to (A) the “Shelf Agreement” shall mean the
Agreement as amended by this Amendment, and as the same may be further amended
or modified from time to time, and (B) the “Notes” shall mean the Notes as
defined in the Agreement as amended by this Amendment, and as the same may be
further amended or modified from time to time.


 


(g)                                 Series I Notes.  On or before June 30, 2004, the Company agrees to satisfy
all of the conditions set forth in paragraph 3A of the Agreement for the Series
I Closing (including, without limitation, (i) the Purchasers of the Series I
Notes shall have received the structuring fee referred to in paragraph 2I(4) of
the Agreement, as amended hereby, (ii) Prudential shall have received a Funds
Delivery Instruction Letter in the form of Exhibit H attached to the
Agreement, duly executed by the Company, and (iii) each Purchaser shall have
received the opinion described in paragraph 3A(viii) of the Agreement, provided
that such opinion shall, in addition to such other matters as the Purchasers
may reasonably request, cover this Amendment, the Agreement as amended hereby,
the Guaranties as amended hereby and the Security Documents as amended hereby).


 


(h)                                 Headings. 
The headings of the various paragraphs and subparagraphs of this
Amendment are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof.


 


(i)                                     FINAL
AGREEMENT.  THE AGREEMENT, AS AMENDED BY
THIS AMENDMENT, TOGETHER WITH THE NOTES, THE GUARANTIES, THE INTERCREDITOR
AGREEMENT AND THE SECURITY DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


[Remainder of page is intentionally left blank; signature
pages follow]


 


13

















 


If you agree to
the terms and provisions hereof, please evidence your agreement by executing
and returning a counterpart of this Amendment to Western Gas Resources, Inc.,
1099 18th Street, Suite 1200, Denver, CO 80202, Attention: General Counsel.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WESTERN
  GAS RESOURCES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President- CFO

  



 


 


Agreed as of the
date first above written:


 


THE
PRUDENTIAL INSURANCE COMPANY

OF AMERICA


 


 


	
  By:

  	
  /s/ Brian E.
  Lemmons

  	
   

  
	
   

  	
  Vice President

  



 


 


PRUCO LIFE INSURANCE COMPANY


 


 


	
  By:

  	
  /s/ Brian E.
  Lemmons

  	
   

  
	
   

  	
  Vice President

  



 


 


PRUCO
LIFE INSURANCE COMPANY OF

NEW JERSEY


 


 


	
  By:

  	
  /s/ Brian E.
  Lemmons

  	
   

  
	
   

  	
  Vice President

  



 


PS-1

















 


ING LIFE INSURANCE & ANNUITY
COMPANY


 


	
  By:

  	
  Prudential
  Private Placement Investors,

  L.P. (as Investment Advisor)

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Prudential
  Private Placement Investors, Inc.

  (as its General Partner)

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Brian E.
  Lemmons

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  
					



 


	
  GIBRALTAR LIFE INSURANCE CO., LTD.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Prudential
  Investment Management (Japan),

  Inc., as Investment Manager

  
	
   

  	
   

  
	
  By:

  	
  Prudential
  Investment Management, Inc.,

  as Sub-Adviser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E.
  Lemmons

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  
					



 


 


	
  RGA REINSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Prudential
  Private Placement Investors,

  L.P. (as Investment Advisor)

  
	
   

  	
   

  
	
  By:

  	
  Prudential
  Private Placement Investors, Inc.

  (as its General Partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E.
  Lemmons

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  
					



 


PS-2

















 


AMERICAN
BANKERS LIFE ASSURANCE

COMPANY OF FLORIDA, INC.


 


	
  By:

  	
  Prudential
  Private Placement Investors,

  L.P. (as Investment Advisor)

  
	
   

  	
   

  
	
  By:

  	
  Prudential
  Private Placement Investors, Inc.

  (as its General Partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E.
  Lemmons

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  



 


 


FORTIS BENEFITS INSURANCE COMPANY


 


	
  By:

  	
  Prudential
  Private Placement Investors,

  L.P. (as Investment Advisor)

  
	
   

  	
   

  
	
  By:

  	
  Prudential
  Private Placement Investors, Inc.

  (as its General Partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E.
  Lemmons

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  



 


 


CONNECTICUT
GENERAL LIFE INSURANCE

COMPANY


 


	
  By:

  	
  Prudential
  Investment Management, Inc.,

  as Investment Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian E.
  Lemmons

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  



 


PS-3

















 


Agreed and
acknowledged by each of the undersigned for

the purposes set forth in paragraph 4(f).


 


	
   

  	
  MIGC, INC.

  
	
   

  	
  MGTC, INC.

  
	
   

  	
  WESTERN GAS RESOURCES-TEXAS, INC.

  
	
   

  	
  MOUNTAIN GAS RESOURCES, INC.

  
	
   

  	
  LANCE OIL & GAS COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President- CFO

  
	
   

  	
   

  	
   

  
	
   

  	
  WESTERN GAS WYOMING, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Western Gas
  Resources, Inc., its sole

  
	
   

  	
  member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
   

  	
  Executive Vice President- CFO

  
						



 


PS-4